Can I trust Lloyds?

Lloyds TSB (Scottish Widows) has sent an invitation to vote for a change in the conditions of my Peps, to convert some unit trusts into Open-ended investment companies (Oeics). I don't trust any financial organisation that is suggesting changes and am tempted to vote against it. JB, Hants.

Anna Bowes, independent financial adviser at Chase de Vere, says: The transfer from unit trusts to Oeics has been going on for some time and other large institutions like M&G and Fidelity have already gone through it.

In effect the industry is introducing an investment that is trying to offer the best of the unit trust and investment worlds, by creating an open ended investment - one that can create and destroy units as required. The Oeic value represents the genuine value of the underlying investments, unlike investment trusts which reflect market demand for their shares and therefore can trade at a premium or a discount.

But the main difference is that an Oeic is quoted at one price as opposed to a unit trust, where there are two prices (the bid and the offer price).

That means with an Oeic the charges are clearer because you are given a price and then a charge, unlike unit trusts where the charge forms a part of the bid-offer spread.

You can be assured that the transfer will proceed without any detriment to you or any other investors so we normally suggest that it is fine to vote in favour of it.